Social Media has shown us a huge shift from traditional advertising to affiliate marketing. You may have asked yourself “How you can I grow my own business with affiliate marketing?” I think it’s a great idea and I even participate in affiliate marketing myself. You can check out the best affiliate program for bloggers, my program here. I use affiliate marketing for products and services that I use and I also use it to market my own products and services. Since affiliate marketing is part of my online presence I decided to write this Ultimate Guide on Affiliate Marketing for Business Owners.
What is affiliate marketing?
Basically, you let other people market your products and send you website traffic. In return, you pay them a percentage of any sales that are made that originate from their efforts.
The way this works is usually you give them special hyperlinks that they can post on their website. These hyperlinks usually contain an ID code which helps to track their efforts.
In this example, a blogger might put this link on their blog to try to get their readers to click through to your page and hopefully buy something. If the visitor who clicks on this link actually buys something, affiliate tracking software will automatically (usually – depends on what system you are using) pay your affiliate a percentage of the sale.
Another way you can do this is by giving them their own discount code that works with your Ecommerce store. Like “CRYSTAL10” for 10% off or free shipping. This way when a visitor buys something and uses the code (which they have an incentive to do), you can track the sale to your affiliate and pay them a percentage of the sale.
Sounds legit, right? Anybody can sell your products and you just give them a cut of the sales. Before you jump in head first there are three important things you need to do prior to launching your own affiliate marketing program.
Figure Out How Much of a Commission You Can Afford to Pay
You’ll have to do some math to figure out how much of a percentage you can afford to give up to do affiliate marketing. Can you part with 5% of the total revenue that comes from a sale? How about 10%? The higher the percentage, then generally the more affiliate traffic you will receive.
If you’re really interested in setting up an affiliate program, you may want to raise your prices to allow margin to pay affiliate marketers. Don’t be stingy with your affiliates. My affiliate program pays 50% commission.
Treat your affiliate commissions like you would an advertising budget. Not only are they bringing you sales, they’re bringing you new customers.
Build Your Own Tracking System
If you don’t want to use an affiliate network, you can build your own tracking system. For example, Shopify shops have plugins and models that you can install to start your own affiliate marketing program. Because my site is a WordPress site, I use WP Affiliate. It’s just up to you to advertise your program well enough to get affiliate marketers to want to join.
You want to make sure that you contractually set the Terms and Conditions for your relationship with your affiliate marketer. This can include payments, liabilities, taxes and many other things. As an attorney and affiliate marketer myself, I drafted a simple Agreement for business owners to use with their affiliates. This legal document is clear and concise about party expectations and the bounds of the agreement.
Alternatively, you can join an Affiliate Marketing Network. The easiest thing to do is to sign up for an affiliate marketing network like ShareaSale. They provide a marketplace where your affiliate program will be advertised to other affiliate marketers. They also provide the tracking software for your affiliates so you don’t have to build your own tracking system. In some ways this is better because it takes care of the trust issues. Affiliates are always suspicious of whether or not they’re getting credited for the sales they generate. By having an intermediary take care of transaction tracking and payments, the fear of being cheated is alleviated. Affiliate networks will also take a cut of your sales or charge fees to use their network. So you’ll have to weigh this additional cost to see if you can afford it.
from the lawyer next door,
FTC: I participate in an affiliate marketing program. If you choose to make a purchase as a result of clicking a link, I may receive a small commission of the sale. This helps me run my blog and I don’t talk about things I don’t actually use.
Legal Disclaimer: Although I am a lawyer by profession, I am not YOUR lawyer. All content and information on this website is for informational and educational purposes only, does not constitute legal advice and does not establish any kind of attorney-client relationship by your use of this website.